Foreclosures Double as Owners Struggle to Refinance Mortgages -- By Bob Ivry -- April 16 (Bloomberg) --
"The number of U.S. homes entering foreclosure in the first quarter doubled from a year earlier as property prices stagnated and owners struggled to refinance mortgages. Owners of 168,829 homes in the first three months of 2007 received notice that lenders had filed for foreclosure due to failure to pay loans or liens, Foreclosures.com said today in a statement. That compares with 83,154 homes in the same period of 2006, the Sacramento, California-based research firm said.
A four-year high in mortgage payment delinquencies and the failure or sale of 50 subprime mortgage companies, which provide loans to people with poor or limited credit histories, has made credit less available. The inability of homeowners to refinance their debt has added to the rise in foreclosures. ``A lot of folks have been borrowing and borrowing and borrowing to stay out of trouble,'' Foreclosures.com President Alexis McGee said in an interview. ``Now that there are less borrowers in the marketplace, where are they going to go? Unless lenders step up and offer money to these people, they'll be locked out.''
Riverside County, California, had a 172 percent rise in the number of homes entering the foreclosure process in the first quarter, the biggest increase of any county in the U.S., the company said.
Foreclosures.com said other counties showing big increases were Clark County, Nevada, which includes Las Vegas (143 percent); Los Angeles County, California, (92 percent); Miami- Dade, Florida (90 percent) and Cook County, Illinois, where Chicago is located (44 percent). The findings come as the National Association of Home Builders/Wells Fargo index of U.S. homebuilders' confidence fell to the lowest level of the year in April. The index dropped to 33 from 36 in March, the Washington-based association said today. A reading below 50 means most respondents view conditions as poor.
The National Association of Realtors said last week the median price of a home will fall 0.7 percent this year to $220,300. Mark Zandi, chief economist for Moody's Economy.com in West Chester, Pennsylvania, also said last week that the median price will slide to $210,000 in 2008, the lowest level since March 2004.
Most homeowners who enter the foreclosure process do not lose their houses. In many states, the process can be initiated by the lender when a borrower falls just one day behind, McGee said."
It is really almost unbelievable how fast foreclosures have shot up in the US and the biggest house price declines are still to come yet. The weakness of the average American's finances is astounding to me. Combine rampant consumerism with cheap and available credit and we've got a massive recipe for disaster like we've never seen before. Things look really bad - this will be a financial correction for the history books.